Coffee is a booming business. You can’t walk 50m down a high street in the UK without seeing a coffee shop. With a plethora of chains, Costa, Starbucks, Coffee #1 e.t.c it’s so easy to depart with your hard earned money for a quick treat. Even Greggs is now serving coffee (not too bad either) and the expansion of McCafe by McDonalds only adds to the growing temptations.
Quick treats often turn to habits and before you know it you’re grabbing a coffee every time you’re in town and on your way to work – at around £2.50 – £3.00 a time (more if you enjoy some iced drinks) this habit becomes an expensive one.
From premium coffee to expensive hipster trends, it’s becoming abundantly clear how easily and mindlessly many millennials hand over their hard-earned money. Coffee may well be the biggest leech to millennial wallets.
Let’s talk about cash. How much money could you really be spending yearly on coffee? Well, that depends on how many times a week you buy coffee from a chain such as Starbucks and what drink you order. For guidance;
A medium latte from Starbucks costs £2.70;
One coffee a week = £140
Two a week = £280
Three a week = £421
Four a week = £560
Five a week (one every working day) = £702
A large coffee (£3.10 a coffee at Starbucks) would cost you £806 a year!
You could really be spending £806 a year if you bought a large coffee from Starbucks every working day.
Keep in mind that these figures don’t include any extra spend on toast, buns and cakes!
How to buck the trend.
I used to drink at least three cups of coffee a week from premium coffee shops meaning that I spent £421 a year on coffee (probably more because I got addicted to caramel slices). Money that could have been spent on a trip, debt, my loved ones or more than likely a stake in a dividend growth stock.
Addiction is hard to beat but I managed to reduce my coffee intake to around once a fortnight by simply ‘charing myself’ for coffee.
Every time I would want coffee from Costa/Starbucks e.t.c I would open the internet banking app on my phone and transfer £2.70 from my current account into my savings account. To my amazement, this was very motivating and before I knew it I was transferring myself money for many things that I was tempted to buy;
When I wanted a can of coke – 70p transferred
When I wanted some Ice cream – £1.50 transferred
When I wanted a take away – £12 transferred
(It’s actually quite empowering!)
This isn’t to say that you shouldn’t enjoy these things. But I find, you can enjoy things more if you save them for when you’re enjoying a nice day, doing things you love with your loved ones and not on your way to work. Even better, enjoy these things when you retire in your 40s from saving all this money and investing it in high quality dividend growth stocks!
Another thing I started doing was simply switching where I drank coffee. A medium latte in Starbucks is £2.70. A medium latte in McDonalds is £1.69. Although I can fully admit that McDonalds coffee is not as good as Starbucks coffee it’s not that far off and definitely better value for money. After all, a £3 a week saving is a £150+ saving yearly.
Save yourself some money, change your coffee habit and start spending your money on the things you really value.
If you’re interested in the growing UK coffee market I found this article from the financial times very insightful: http://on.ft.com/2aUFden